Arizona Public Service Company is quietly laying off hundreds of workers at the Palo Verde Nuclear Generating Station and replacing 200 union tradesmen with nonunion workers.

APS, which manages the nation's largest commercial nuclear power plant for a consortium of seven utilities, plans to eliminate at least 497 positions at the plant, says company spokesman Wayne Kaplan.

The layoffs are part of a reduction in force that has swept through APS and its corporate parent, Pinnacle West Capital Corporation. The company does not consider the work-force reductions as layoffs, but instead has coined the term "re-engineering."

The reductions include at least 201 APS positions and 241 contract workers. Another 55 vacant positions won't be filled, Kaplan says. The company is offering voluntary severance packages for APS employees that include up to 39 weeks' pay.

The APS employees laid off may still find work at the power plant. The company hopes to replace an additional 174 contract employees with APS workers.

"If we find a Palo Verde employee to do the job, the contractor will go," Kaplan says.

More Palo Verde layoffs are expected throughout 1994, says Kaplan, who is among those losing jobs. Before the layoffs began, the plant employed 2,794.

In addition to the layoffs, APS terminated a longtime contract with Bechtel Corporation to provide skilled laborers at the plant.

Palo Verde spokesman Mark Fallon says APS has signed a multiyear contract with Fluor Daniel, Inc., an Irvine, California, construction company, to provide skilled labor. Fluor Daniel will provide 130 nonunion tradesmen, replacing the 200 unionized Bechtel Corporation workers, says Fallon.

Fallon says APS selected Fluor Daniel to provide contract labor based on the "economic competitiveness" of its bid. The fact that the company is a nonunion outfit "was not a consideration in the selection," Fallon says.

San Francisco-based Bechtel, one of the largest construction companies in the world, was tightlipped about its ouster. "We just see that as an everyday part of construction," says Bechtel spokeswoman Christina Bruno. "We accept this as being part of APS' decision."

The work-force reductions, Fallon says, are made possible because of a new companywide training program that encourages workers to undertake additional tasks.

"This is part of our effort to streamline operations, making it more effective and economical," Fallon says.

Union leaders say the "re-engineering" program is nothing more than a cross-training program that takes former midlevel supervisors and engineers and requires them to do tasks formerly reserved for skilled laborers such as electricians.

"They bump these guys into the rank-and-file jobs," says Bill Dixon, national representative for the Utility Workers of America.

Dixon says Fluor Daniel has a reputation for hiring low-wage workers from across the country. He says their pay will range from $7 to $10 an hour, compared to the union wages of $17 to $20 an hour.

Fluor Daniel spokeswoman Deborah Land says the company is accepting job applications at the nuclear plant. The company takes over maintenance operations on July 5.

Nuclear Regulatory Commission inspectors at Palo Verde say the agency is closely monitoring the labor reductions. While the cutbacks have worried workers, NRC inspector Al Macdougall says the agency doubts the changes will create additional operational problems at the plant.

In fact, another NRC inspector says the work-force reductions should improve the plant's performance because layers of bureaucracy that have hindered operations will be reduced.

"They need to take a hard look at their work processes, to streamline them, make them more effective and to empower their workers," says NRC inspector Ken Johnston.

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John Dougherty
Contact: John Dougherty